Feds increased, state cut gas-safety funding

Tim Darragh and Scott KrausOF THE MORNING CALL

Fatal gas pipeline explosions in Allentown and Philadelphia this year are casting light on whether the nation's pipeline-inspection system, funded by state and federal assessments on gas utilities, is adequate to keep the public safe.

Pipeline safety became an increasing federal responsibility in recent years, after a deadly 1999 blast in Bellingham, Wash. Since then, Congress created a new federal agency to oversee pipeline safety and Washington has promised more money to states.

But as Washington shouldered more of the cost, assessing more fees on utilities to cover safety inspections, Pennsylvania cut back on its financial demands on utilities. So even as federal funding for safety inspections in Pennsylvania doubled between 2006 and 2010, the state cut its share by 30 percent.

Despite that cut, and thanks to the federal government's bolstering of safety-inspection funding, the total budget for inspections in Pennsylvania has grown about 4 percent a year since 2006.

Until this year, Pennsylvania's safety record was improving, with serious events such as explosions and spills declining each year since 2005-06. Last year, the state hit an all-time low, with one "reportable incident," said Paul Metro, Public Utility Commission's chief engineer for gas safety.

That record was preserved this year when two major incidents occurred within the first two months of the year. On Feb. 9, an explosion ripped through N. 13th Street n Allentown, killing five. About three weeks earlier, an explosion in Philadelphia killed a Philadelphia Gas Works employee and injured five.

It's unknown if more inspectors would have prevented the Allentown blast, in which investigators are focusing on a section of 83-year-old pipe operated by UGI Corp. State inspectors have 40,000 miles of natural gas pipeline to oversee, and part of their duties includes reviewing reports from the utilities, the first line of defense in the inspection system.

The condition of that aging infrastructure raises questions about the PUC's ability to protect gas customers from accidents, said state Rep. Julie Harhart, R-Lehigh, who sits on the state House Consumer Affairs Committee, which oversees gas utilities.

"What is really needed?" Harhart asked. "Do we need more inspectors? Do we need more oversight by the PUC?"

Harhart hopes to ask PUC officials those questions as the House considers expanding the agency's oversight to include pipelines being built by companies tapping the state's Marcellus Shale natural gas reserves.

Carl Weimer, executive director of the Pipeline Safety Trust, a national watchdog group, said utilities control pipeline safety far more than any oversight agency. "It's almost a self-regulatory system," he said.

The PUC budgets about $1.2 million a year for gas-safety inspections. In 2009, its inspectors identified 47 violations of pipeline safety regulations, the second-lowest number of annual violations since 2001, according to federal regulators.

U.S. Sen. Bob Casey, D-Pa., who has called for increased federal funding, said he'll work to make sure any funding increases result in more inspections.

To pay for inspections, states figure out their budgets, ask the federal government for 80 percent of the funding, and make up the balance by charging gas utilities based on their total revenues, according to PUC spokeswoman Denise McCracken.

"Rather than promote a certain funding level, AGA believes it is critical that all stakeholders work together to improve pipeline safety in areas such as excavation damage prevention, public awareness, and managed encroachment around existing pipelines," she said.

In recent years, vacancies in the gas safety division led to a decline in inspections. Measured in the hours spent on investigations, expressed in "person days," PUC safety inspections fell from 789 days in 2005 to 579 in 2008. By 2009, though, the PUC had restored staffing and then some, boosting the inspection staff from six to eight and completing 1,041 days of inspections.

Dan Adamo, marketing manager for UGI's East Region, said PUC inspectors perform unannounced field inspections and review safety-related records. The inspectors have been "increasingly involved and active on our gas system over the last decade and, to our understanding, the state as a whole," Adamo said.

Pennsylvania gets good marks from federal authorities for complying with inspection standards, including inspector training and maintaining a sufficient number of "person days" doing the job.

Pennsylvania ranks eighth among states in the number of inspectors, falling behind high gas-production states like Texas and Louisiana and more highly regulated states such as New York, which has 24 inspectors, federal records show.

It's the nature of the system that authorities think little about pipeline safety until a tragedy happens. That was the case in the state of Washington after the Bellingham disaster, said David Lykkens, director of Pipeline Safety at the Washington Utilities and Transportation Commission.

Following that tragedy, the state doubled its inspection staff to eight, he said. "A [state] program can ask for additional money," he said. "Whether they're going to get the money is beside the point."

A better solution could be requiring gas utilities to step up replacement of old cast-iron distribution lines like the one suspected in the Allentown explosion, said Rep. Doug Reichley, R-Lehigh, who sits on the House Consumer Affairs Committee.

Such a requirement could be attached to legislation gas utilities support that would create a charge to be added to customers' bills to finance the replacement of cast-iron and bare steel lines.